CRE Bridge in San Francisco

It adds a cliff that dwarfs a year of rate spread, so price it before you price the loan. San Francisco's transfer tax is tiered on the entire consideration, not the increment above each bracket: a sale at $9,999,999 pays $225,000, and the identical asset at $10,000,000 pays $550,000, a $325,000 jump for one dollar of price. A proposed reduction under the BUILD Act has not passed. File 260178 was still pending committee action as of the last recorded action on 2026-04-08, and its proposed 2026-07-01 operative date came and went unenacted. Model the exit on the current schedule, not on relief that may never land.

Office, and it is a repricing story, not a recovery story. San Francisco office vacancy was 29.2% in the second quarter of 2026, against a pre-pandemic benchmark of 4.70% in the second quarter of 2019, but the quarter also posted 963,980 square feet of positive net absorption and an average asking rent of $72.96 per square foot, full-service gross. That combination, a wide vacancy gap with real leasing demand, is exactly the value-add setup a bridge lender is asked to fund, and it is also why the eventual takeout is the part that has to be underwritten carefully rather than assumed. See the California bridge and foreclosure rules for structure. Once income catches up, see San Francisco CRE permanent options for the takeout.

Whether the building's mandatory seismic retrofit is done, permitted, or in violation, and it's a checkable public record before you fund. San Francisco requires soft-story retrofit of wood-frame buildings permitted before 1978-01-01 with five or more residential units and two or more stories over a basement or underfloor area; a building out of compliance carries an Earthquake Warning placard. The same retrofit is the one capital cost that is fully recoverable from rent-controlled tenants: work required by law passes through at 100% of certified cost, amortized over 20 years, against the 50% recovery rate that applies to an ordinary improvement in a six-plus-unit building. Frame the passthrough as a Rent Board petition to file, not an entitlement already in hand, and confirm the mechanics with land-use counsel before underwriting to it. The same retrofit is also one of the routes to unlimited ADUs; see San Francisco ground-up construction terms if the project becomes a vertical build.

Longer than a bridge term assumes, and the timeline is set by ordinance, not by negotiation. An Ellis Act withdrawal gives tenants a minimum of 120 days to vacate, extended to one year for a qualifying elderly or disabled tenant, and encumbers the property for ten years with a five-year re-rental constraint and an all-or-nothing rule if any unit returns to the market. Relocation payments are published and current for 2026-03-01 through 2027-02-28: $8,245.00 per tenant to a $24,733.00 per-unit cap for an owner move-in or capital improvement, and $11,110.05 to $33,330.13 per unit under Ellis. The owner move-in schedule adds $5,497.00 for each tenant 60 or older, each disabled tenant, or a household with minor children, and Ellis adds $7,443.90 for each tenant 62 or older or each disabled tenant. A negotiated buyout is its own filed and rescindable process: no signed agreement until 30 days after discussions begin, and the tenant can cancel up to day 45. Price the hold period off the ordinance, not off the rent roll.

Only on a two-unit building, and even that path is narrow. San Francisco Public Works' ordinary residential condominium conversion application covers two residential units only, and its process flowchart is titled for both units owner-occupied. The Expedited Conversion Program, which used to cover two to six units, is currently marked suspended for Group 7, with a partial suspension in place since 2017-08-15. Commercial condominium conversion is a separate, live Public Works application. Ask what the real exit is, condo sell-out, refinance to permanent debt, or hold, before underwriting a rehab to a conversion that may not have a live path. We write the bridge and the permanent loan, so the takeout gets tested up front. Both are subject to underwriting.

Not one we can point to, so do not underwrite to an incentive that may not exist. A 29.2% office vacancy rate is the obvious setup for an adaptive-reuse story, but we could not source a program from San Francisco Planning, and the city's transfer tax page carries no conversion exemption. If a program or fee waiver exists, it has to be confirmed directly with San Francisco Planning before it goes into a business plan. What is confirmed is the underlying opportunity: real vacancy, real asking rents, and real leasing demand in the same market. Talk to us about structuring the bridge around what is actually sourced.

Plan on at least 25% of value, plus closing costs. Maximum leverage is up to 75% LTV, so on an $8,000,000 asset that is up to $6,000,000 from us and $2,000,000 from you (8,000,000 x 75% = 6,000,000). The loan is interest-only, which keeps the carry down while the business plan runs, and it can be a purchase bridge or a cash-out against equity you already hold. On a repositioning, budget the transfer tax and the retrofit line as cash items alongside that equity, not as an afterthought. Subject to underwriting.

Up to $10,000,000. At 75% LTV that covers an asset of roughly $13,300,000 (10,000,000 divided by 0.75 = 13,333,333), which reaches a good deal of the small and mid-size office and multifamily stock trading in this market. Note that a sale above $10,000,000 also lands in the 5.50% transfer tax bracket, which applies to the entire price, so on a deal near that line the tax, not the loan ceiling, is usually the number that decides the structure. Subject to underwriting.

It can be. We write terms up to 24 to 36 months, interest-only. That matters here because the vacancy timeline is set by ordinance: an Ellis Act withdrawal gives tenants a minimum of 120 days, extended to one year for a qualifying elderly or disabled tenant, and a negotiated buyout cannot be signed until 30 days after discussions begin, with the tenant able to cancel through day 45. Size the term to the ordinance path you can actually document, not to the fastest case. The takeout gets tested at the same time as the bridge. Subject to underwriting.